Small-cap mutual funds beating SIP returns of their benchmark index

Investors looking for growth opportunities may be pleased to learn that small-cap mutual funds invested through a Systematic Investment Plan (SIP) have shown promising results. According to recent data, SIP returns in small-cap funds have managed to outperform the returns delivered by the benchmark index, suggesting the potential for significant gains in this asset class. Let’s dig deeper into this trend, exploring the outperforming small-cap funds and offering insights for investors considering incorporating small-cap SIPs into their financial strategy.

Established in April 2005, the NIFTY SMALLCAP 250 TRI is a benchmark for all small-cap funds. If you had invested Rs 10,000 per month in this, it has provided notable returns, growing a 1,20,000 Rupee investment to Rs 1,42,824.88, resulting in a return of 45.46% in the 12 months. The category of small-cap funds achieved an average return of 32.89%.

The following 4 small-cap funds beat the SIP returns of the benchmark in the last 12 months:

1. Quant Small Cap Regular Plan: Launched way back in November 1996, the Quant Small Cap Reg scheme has shown an impressive AUM of Rs 17,193.09 crore with a relatively low expense ratio of 1.67%. An investment of Rs 1,20,000 through SIP has grown to Rs 14,9095.77, yielding a remarkable return of 58.97% in 12 months. This scheme demonstrates a long-standing track record and substantial growth over the years.
2. Bandhan Small Cap Regular Plan: Introduced in February 2020, the Bandhan Small Cap Reg scheme has garnered a decent AUM of Rs 4,389.28 crore with a slightly higher expense ratio of 1.84%. Despite being a relatively new entrant, the scheme has shown promising growth, turning a Rs 1,20,000 through SIP investment into Rs 1,47,970.72, achieving a return of 56.52% in 12 months. It reflects the potential for growth in the small-cap segment despite being launched recently.
3. ITI Small Cap Regular Plan: Also launched in February 2020, the ITI Small Cap Reg scheme manages an AUM of Rs 1,771.80 crore with an expense ratio of 1.95%. Despite a slightly higher expense ratio, it has delivered competitive returns, with the invested amount of Rs 1,20,000 through SIP growing to Rs 1,47,263.11, resulting in a return of 54.98% in 12 months. The scheme illustrates the growth potential even with a higher expense ratio compared to peers.
4. Mahindra Manulife Small Cap Fund Regular Plan: Introduced in December 2022, the Mahindra Manulife Small Cap Fund has garnered an AUM of Rs 3,526.63 crore with an expense ratio of 1.84%. Although a relatively new offering, it has shown promising growth, turning a Rs 1,20,000 through SIP investment into 1,45,010.57 Rupees, achieving a return of 50.12% in 12 months. Despite being launched recently; it showcases the potential for growth in the small-cap segment.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.